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Americans made less in 2009; minimum wage set to rise in seven states

December 21, 2010 | 11:18
am

In a bit of news that probably surprises no one, Americans made less money last year than they did the year before, the Bureau of Economic Analysis said Tuesday morning. Total compensation of U.S. workers shrank 3.2% in 2009. Blame it on declines in manufacturing and construction industries, the bureau said.

Just to be clear, compensation is the income companies pay employees for their work, as well as supplements such as contributions to pension and insurance funds. Employers, not employees, report compensation. So if you're getting paid by your father to pick up leaves clogging the gutter in the rain, you probably aren't counted in this study.

There were some counties where compensation actually increased in 2009. In Los Angeles, compensation increased 1%, to $268 billion, making it the county with the highest compensation in the country. On average, people in Los Angeles County made $65,126 per job.

In Anne Arundel County, Md., compensation increased 4.4%. In Arlington County, Va., it increased 4%.

Others weren't so lucky. Thanks in part to the financial crisis, the County of New York lost a whopping 7.4% of its compensation in 2009. People in the county still made $262 billion, and the average compensation per job was $109,028 (sounds like it's time to move to New York!). Compensation in St. Louis County, Mo., fell 11.5% in 2009, the most of any county.

Those that had jobs saw their incomes rise 1.2% in 2009. The average annual compensation per job was $56,962. Don't make that much? Maybe you should switch to the professional, scientific and technical services sector. It represented the largest share of compensation in 2009, 10.7%.

If you're making way less than the average annual compensation per job, there may be some good news coming your way. On Jan. 1, the minimum wage is set to increase in seven states, which will help 647,000 workers, according to the National Employment Law Project, a workers advocacy group. The minimum wage will increase by about 10 cents in Arizona, Colorado, Montana, Ohio, Oregon, Vermont and Washington. That raises the minimum wage to as high as $8.67 in Washington, and to $7.35 in Arizona.

That could help the economic recovery, the group says, because many of the jobs being created now are low wage.

Declining compensation is bad news for the people who aren't working, of course, but it's also bad news for the governments that want them to pay taxes, or that want them to buy things and then tax those purchases. The less people make, the less the government takes. Shrinking local government revenues are expected to slow down the economic recovery.